If a Firm Has Established Monitoring Devices That Have a 50

question 18

Multiple Choice

If a firm has established monitoring devices that have a 50% chance of detecting shirking,and an employee gains $5,000 from shirking,the employer can deter shirking by having employees post a bond equal to

• A) $2,500.
• B) $5,000.
• C) $10,000.
• D) $50,000.

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Definitions:

Prevention Costs

Expenditures made to avoid defects in products or inefficiencies in services, part of quality control measures.

Value-Added

The enhancement a company gives its product or service before offering the product to customers, increasing the product's value.

Value-Added

The enhancement a company gives its product or service before offering the product to customers.

Non-Value-Added

Activities or processes that do not add value to a product or service from the customer's perspective, potentially leading to unnecessary costs.